May 21, 2011

For the benefit of those not already following it obsessively, this post will compile the most recent publicly available developments relating to the Rakofsky litigation, in which Joseph Rakofsky is suing an array of media organizations, professional organizations and, above all, individual legal bloggers, claiming that he has been damaged by their publication of reporting and commentary on a murder trial in Washington, D.C., in which Mr. Rakofsky served for a time as defense counsel. This may be the first in a series of roughly weekly updates, or it may be a one-off. If new developments and public interest warrant it, I will compile and post on the case in the future. If not, then not.

I am a defendant in the Rakofsky case, because of my having written this post; I commented on my involvement in the action here. To the extent that I may have any non-public information concerning the case, I will not be sharing it.

Here, then, are the highlights of Rakofsky, Week 2.

~~~

Pleadings/Court Filings

The Complaint in the case of Joseph Rakofsky, et. al. v. The Washington Post Company, et al., New York Supreme Court*, County of New York Case No. 10557-2011, was filed on May 11, 2011. That complaint named 74 defendants and stated two theories of recovery: defamation [libel] and violation of New York's Civil Rights law. A copy of the Complaint has been uploaded by [defendant] Mark Bennett, here.

On May 13, the lawsuit's existence was announced to the world by [defendant] Scott Greenfield on his Simple Justice blog in a post that gave to it the name by which it is now universally known: Rakofsky v. Internet.

This past Monday, May 16, Joseph Rakofsky and his attorney filed an Amended Complaint. That new pleading increases the number of defendants from 74 to 81, largely by adding parties who wrote or blogged about the Rakofsky v. Internet action itself in the first few days after it was filed. The Amended Complaint also expands the plaintiff's legal theories. In addition to the original defamation and civil rights claims, the Amended Complaint adds counts alleging "Intentional Infliction of Emotional Distress" and "Intentional Interference with Contract." A copy of the Amended Complaint is being hosted by [non-defendant, so far] Keith Lee at An Associate's Mind.

Because the case is still so new, there have been no filings with the Court apart from the first and second versions of the Complaint. The particular defendants who have been served with the complaint, or on whom Rakofsky may claim he has accomplished service, is not yet a matter of record.

~~~

Rakofsky Online

[Defendant] Mark Bennett is maintaining an ongoing compendium of links to Rakofsky-related posts on his blog, Defending People. My own selection of links below is purely subjective and not comprehensive. I strongly recommend prowling through the Compendio Bennetticus for the full range of responses.

On his New York Personal Injury Law Blog, [defendant] Eric Turkewitz issued what is possibly the most-read Rakofsky retort so far: "Joseph Rakofsky — I Have An Answer For You". Eric's answer is not for the eyes or ears of the easily offended, even when it is translated in to Latin. That post also lofted the Rakofsky case to broader Internet notoriety when it was reported (with Eric's surname misspelled as "Tukewitz") by Cory Doctorow at boingboing.

The anonymous law student blogger [and defendant] known as J-Dog reported on his attempt at a negotiated resolution. The post includes an excerpt of an email from Joseph Rakofsky himself, who suggests that J-Dog (and presumably all of the other defendants) should have invested in a copy of the reporter's transcript from his D.C. murder trial "before you presumed to harm me."

Much of what is being said about Rakofsky is being said in 140-character snippets on Twitter. Those items can be found by a Twitter search for Rakofsky or for the hashtag #Rakofsky. Two comments here from defendants freshly added to the Amended Complaint:

And two more original defendants' remarks on a notable absence of comment on the case from certain quarters:

A last note on legal representation: Joseph Rakofsky is represented as plaintiff by attorney Richard Borzouye, discussed in this post by [defendant] Mark Bennett. Mr. Borzouye's own website, here, includes a description of his practice that begins with this:

Just two blocks from Grounds Zero, Borzouye Law Firm, P.C. is a full-service Wall Street litigation firm, with an elite New York State & Federal criminal practice . . . .

Emphasis added. Spelling in original. Good taste is timeless.

The Rakofsky Weekend Update will return to Decs&Excs next week, if warranted by developments and public demand.

~~~

* Although the "Supreme Court" in federal practice and in most states is an appellate court at the highest level of the judiciary, in the State of New York the Supreme Court is the ground level trial court.

May 13, 2011

Lawyers, even the best of lawyers, are only human, no matter what they say. Lawyers, even the most experienced of lawyers, but particularly younger and less experienced lawyers, can and do make mistakes. When mistakes are made, in the law or in any other human activity, it is always to be hoped that the one making the mistake will (1) do whatever can be done to minimize or correct its ill effects on others, and (2) learn something from the mistake while moving on from it.

The "moving on" part is important. At least when they don't lead to your conviction of a crime, nearly all but the most notorious, blazing errors can in time be left behind if only you let time do its work. And, like a scabbed-over wound, most errors will heal themselves more quickly if you will Just Leave It Alone.

In early April of this year, a young attorney made what looks to have been a mistake: as reported in the Washington Post and elsewhere, New Jersey attorney Joseph Rakofsky, less than a year out of law school, took on the defense of a murder trial in the District of Columbia. Per the original Post report, he "exhibited what the judge said were numerous signs that he lacked knowledge of proper trial procedure, including telling the jury during his opening statements that he had never tried a case before." The Court directed a mistrial. Rakofsky, for whatever reason, seemed to boast about the outcome on his Facebook page. Inquiring minds in the legal blogosphere began to inquire, and soon "Joseph Rakofsky" had become a teachable phenomenon, an occasion for fellow professionals to derive what lessons they could about the state of the profession and the Do's and Don'ts of practice, procedure, ethics, marketing, and so on, and to share those lessons with their readers. On April 10, I wrote a bit about it here.

Joseph Rakofsky was a several days' wonder, but that was six weeks ago. Today, even most of those who had read the various original reports and posts would probably not be sparing him a thought. But Joseph Rakofsky will not Leave It Alone. Instead, Joseph Rakofsky has done the thing that we teach people to do in this country when they just won't Leave It Alone.

Joseph Rakofsky has filed a lawsuit, in the courts of the State of New York, seeking damages and injunctive relief based upon defamation and invasion of his civil rights.

He has filed a lawsuit against the Washington Post.

He has filed a lawsuit against other print media and reporters who covered the story.

And yes, I am among those named as defendants–we were dubbed almost immediately the Rakofsky 74–and I am specifically referenced in paragraphs 56, 57, 173, 174 and 188(w). At this writing I have not received service of a summons or other process, and perhaps I never will. Scott Greenfield, a New York practitioner himself, has pointed out that New York's "long-arm statute" contains an explicit defamation exception that should make it difficult or impossible for the court to obtain personal jurisdiction over non-New York defendants. (More on that interesting subject from my respected Canadian co-defendant, Antonin Pribetic, here.)

Prudence dictates against any extensive comment on the merits of this case at this time. Others are having their say, at length and with vigor, and a quick search for "Rakofsky" will surely lead interested readers to the highlights and low lights of that discussion, which they may judge for themselves. I will say that, upon review, I have no qualms about the propriety of what I wrote originally. Such lessons as I drew from the case of Mr. Rakofsky were and are there to be drawn.

As is the lesson with which I started this post: Oscar Wilde found that the road from perceived defamation to litigation led instead to incarceration, and with surpassing swiftness. There is no reason to believe that any fate quite so dire awaits Mr. Rakofsky, but there is also little reason to believe that he has done himself any long-term favors by electing to file suit. Already, in the fewer than 48 hours since his suit came to light, he has resumed his place as a source of merriment and a target of scorn across the Internet. There may be someone out there writing in his support, but I have not seen any sign of it thus far. I'm no clairvoyant, but I have to believe that at some point in his future a chastened Mr. Rakofsky will look back with regret on the course he has chosen this week, and wonder why he didn't or couldn't Just Leave It Alone.

Unknown scam artists, possibly Canadian or possibly Australian or possibly neither, have apparently "borrowed" the likenesses of several UK solicitors without permission in order to implement an email fraud scheme targeting attorneys.

The success of the scheme depends in part on the lawyer-victim's belief that he/she has been contacted by a fellow practitioner, an attorney with the Toronto law offices of "Wagner Elliot LLP." That firm does not in fact exist. It does, however, have a nice looking website.

As we will see below, "Wagner Elliot" is not real, but the contents of its website are derived directly—plagiarized, really—from the actual site of an actual law firm. For better or worse, the fake site's air of verisimilitude is enhanced by its being liberally sprinkled with the sort of empty rhetoric beloved of law firm websites the world over: Wagner Elliot is "committed to providing commercial legal advice of the highest quality at a sensible cost," and promises service that is "personal, proactive and practical." Just like everybody else.

The lovely building shown atop this post also appears on the Wagner Elliot LLP homepage, implicitly as a depiction of the firm's headquarters. The file name is "Building1.jpg". No such building is located at the Toronto address given by the faux firm. Research by Mr. Pribetic suggests that the address given on the site is actually that of either a housing project or a gas station. (The use on lawyer websites of photos of attractive buildings not otherwise connected to the lawyers in question was recently the subject of deserved scorn from Miami practitioner Brian Tannebaum.)

Intrigued, I undertook a bit of research of my own. A WHOIS search revealed that the "wagnerelliot.com" domain was first registered less than a month ago, by unknown Australian interests giving their address as a "Locked Bag" in Melbourne. The score so far: not real lawyers, and not even real Canadians.

Antonin Pribetic's inquiries went further, turning up what he initially described as "a UK mirror site," for Alan Lowe & Co., a firm of UK solicitors. If you compare the Lowe site (here) with the Wagner Elliot site (here) you will find them to be nearly identical, right down to the homepage appearance of "Building1.jpg".

I must confess that I initially leapt to the conclusion that all three of these firms are fictitious. Some further inquiry, however, quickly led me to a different conclusion: The fake firm of Wagner Elliot LLP has stolen its identity wholesale from the real firms of Mr. Davis and Mr. Lowe, without those gentlemen's knowledge or consent. So complete is the theft of those gentlemen's identities that their photographs have been incorporated in to the phony Wagner Elliot site, under false names.

Here you can view a photograph of the real Alan Lowe, solicitor. Here you can view the same photograph, now identified as that of the entirely fictional "Wagner Elliot." Mr. "Elliot" has even been given Mr. Lowe's biography. A slightly different photo of Mr. Lowe, as himself, appears on the Davis & Co. site.

Davis & Co. is the firm of solicitor Mark Davis, whose photograph in his own right at his own firm can be seen here. That same photo appears on the site of the Lowe firm (scroll down), as these two solicitors maintain a consulting relationship with one another. That same photo also appears, as you have no doubt guessed, on the "Wagner Elliot" site, where it is now identified as that of "Marcus" Davis. This Marcus fellow is credited, falsely, as "the author of ‘Bareboat Charters' published by Lloyd's of Canada Press." The genuine article, Mr. Mark Davis, is in fact the author of that treatise, now in its 2nd edition and published by Lloyds of London.

Solicitor Andy Coyle, who also consults with Mr. Lowe and who practices as well with the offices of Lennon & Co., is also purloined by "Wagner Elliot." He is given his own name on the faux site, although his school has been changed from the University of Liverpool to the University of Toronto.

Are there lessons to be derived from this sordid little affair? Of course. Among them, I would include these:

"Prospective clients" who approach via unsolicited email should be viewed with suspicion, and dealt with very carefully or not at all.

The artistic verisimilitude lent by a pretty website should be viewed with suspicion, and dealt with very carefully or not at all. In fact, no matter what the marketing mavens would like you to believe, the credibility value of any law firm website, no matter how qualified the attorneys behind it may be in real life, is statistically equivalent to zero. Direct contact, with real people, and with real and objective confirmation of skills and experience, is ultimately the only reliable measure of such things. Everything else is just shiny trinketry, distracting at best and, as here, actively deceptive at worst.

Watch your back in the Internet-connected world. This case demonstrates not only how easy it is to create a persuasive set of false appearances online, but also how easily You Yourself may be purloined. The wholesale repurposing of Mr. Lowe's website into the fake "Wagner Elliot" site means that the parallels between them are readily discoverable by a simple Google search. But who would think to make that search on a regular basis? The risk that your identity, and your professional and personal integrity, will be misrepresented online is real and ever-present, and troublingly difficult to catch or prevent.

So there we have it: an email confidence game, carried out by persons unknown, is sufficiently profitable that it warrants the investment required to create—to plagiarize, really—the appearance of legitimacy that a website is presumed to supply. The scandal of the thing is compounded by the brazen misappropriation of the names, likenesses, and reputations of at least three real practitioners. I would hope that no actual damage has been done to those gentlemen, who must be counted among the victims of this scheme. I would hope as well that the actual wrongdoers can be identified and brought to heel, although I confess my expectation is that they have already moved merrily on to their next unsuspecting targets.

April 27, 2011

Some blogs are comment magnets, but this blog is not one of them. If you averaged all comments over all posts since this blog's inception the "comments per post" average would not be zero, but it would probably be closer to zero than it is to, say, two. (I could improve my average by counting, rather than deleting, spam comments, but then the resulting figures would lack credibility—not unlike the job placement figures reported by some law schools. But I digress.)

Because comments are a relative rarity here, I pay attention when someone goes to the trouble of posting one. Yesterday, a comment came in on my post from earlier this month on marketing legal services. The commenter was Ed Poll of Edward Poll & Associates, Inc., of Venice, California, proprietor of LawBiz.com and other law firm management-related enterprises. Mr. Poll is a graduate of UCLA School of Law, as am I. From the records of the California State Bar, it appears that he practiced for some thirty years before electing in 1996 to go on "inactive" status. I surmise he did so in order to devote himself to building his law firm management consulting practice. And there is nothing wrong, at all, with any of that.

Here, in full, is the text of Mr. Poll's comment:

As a marketer, you know how important branding is ... and use of another's brand and registered mark is not appropriate. I can only surmise, then, that your use of my brand in your post was a result of lack of knowledge. The Business of Law(r) is my registered mark since 1995. In the future, should you want to use it, please provide attribution. Thanks.

The phrase "Business of Law," or some variant on it, appears twice in connection with my previous post. In the body of the post, it is included in the opening sentence:

I would like to write a bit about the Business of Law [feh!] and about law firm marketing, but before I can do that I suspect I should make something of a confession.

(Bracketed expostulation in original.)

The phrase also appears, sort of, in the category label that I attached to that post, and which I am attaching to this one: "The 'Business' of Law."

The phrase earns its capitalization by way of one of my personal rhetorical tics as a blogger: I commonly use the capitalization of proper nouns, with its over-formal 18th century aura, in much the way others use "scare quotes," to add ironic distance to a word or phrase. The category label is thus doubly ironic, having both capitalization and scare quotes in its arsenal. As the full post reveals, I have been and remain concerned with the uncomfortable relationship between the duties, aspirations and obligations entailed by the profession of Law and the venal "business" aspects of trying to make money from the practice of that profession or from the appearance of practicing it.

The phrase can be found at least as far back as the 17th century, in the February 18, 1666/67 diary entry of one Samuel Pepys:

Then by coach to the Exchequer about some tallies,and thence back again home,by the way meeting Mr. Weaver, of Huntingdon, and did discourse our business of law together, which did ease my mind, for I was afeard I have omitted doing what I in prudence ought to have done.

Much discussion occurs, from time to time, in America on the question whether the practic of the law has ceased primarily to be a profession and has become a business.

Plus, as they say, ça change . . . .

There is no particular reason for me to think that Mr. Poll is a regular reader of this blog. I would venture to guess that he read my post at all only because he, or some member of his staff, ran a search of the phrase "Business of Law" to see whether anyone might be engaged in the "use of [his] brand." Comments similar to the one that he left with me have appeared on other blogs, for example here (2010) and here (2006).

I suspect that the running of such searches is part of Mr. Poll's regular business practice, as he places sufficient value on the phrase "Business of Law" to have gone to the trouble of registering it with the Trademark Office. If that is the case, however, it is surprising that the comment here, and the other two just cited, are the only instances I can find of his having objected to the (very common) use of the phrase by others. Comments in which Mr. Poll raises objection to the use of the phrase are seemingly equaled or outnumbered by instances in which he cites his ownership of the registered mark as though it is in itself an indicator of expertise, such as:

How is it that law firm marketing folks can come to the law firm management table? Only by understanding The Business of Law(r) [my registered trademark]!

Your firm cannot aspire to achieve your benchmarks unless you understand the operation of the firm as a business (budget, collections, profit, loss), the firm’s billing structure, how each attorney determines firm profitability, and the importance of clients and their own businesses. Years ago, I registered the phrase, ‘The Business of Law(r),’ because it summarizes this foundation of benchmarking.

(Emphasis added.)

So, because Mr. Poll has been moved to call the matter to my attention, I would ask any and all readers of this blog to please take due, proper, and lingering note that, as stated in his Company Policies,

LawBiz®, The Business of Law®, and Your Practical guide to Profit® are registered trademarks of Ed Poll and Ed Poll Management Associates.

The question of what protections or privileges may be associated with that registration is a matter beyond my expertise. I venture to say that the right to prohibit my use, or your use, or anyone else's use, of the phrase "Business of Law" in a blog post or in any other discussion of what is commonly and generically referred to as "the Business of Law" is probably not among them, any more than one could register and thereby prohibit the use of "the Rotating of Tires," "the Theory of Evolution," or "the Certificate of Live Birth." I would further venture to say that the likelihood of anyone concluding that my use of the phrase "Business of Law" is in any way associated with, condoned by, to be confused with, or to be construed as a commentary on Mr. Poll and/or the services available through him and his firm is statistically equivalent to zero.

I have no knowledge or opinion concerning Mr. Poll, his experience, his qualifications, or the value of the services and counsel that he may be equipped to provide to those as wants them. I encourage anyone who is interested to make inquiry directly to Mr. Poll, or to buy one or more of his numerous books, many or which are published under the imprint of the American Bar Association—which has emblazoned the trademark registration symbol on the cover of two out of the three volumes in which Mr. Poll has used "Business of Law" as part of his title.

For my part, I will continue to use the phrase "Business of Law" whenever it is appropriate to do so. It is a perfectly good phrase to describe the thing that it describes. My use of "the Business of Law" in this post, in any previous post, in any future post, or in any other communicative context is based entirely on the settled, primary meaning of that phrase as it has been recognized and understood in these United States since at least 1921, and is not to be taken as having the slightest connection of any kind to Mr. Poll or his firm, except insofar as Mr. Poll and his firm are expressly mentioned, as they have been in this post.

Now, if you will excuse me, I will return my attentions to the Practice of Law.

I would like to write a bit about the Business of Law [feh!] and about law firm marketing, but before I can do that I suspect I should make something of a confession.

You see, here's the thing: I was once a law firm marketer.

It was a good long time ago, but so engaged was I with the marketing of legal services that I even served for a time on the Board of Directors of what was then—this was in the early 1990s—the National Law Firm Marketing Association [NALFMA], which has since become the Legal Marketing Association [LMA], whose just-ended annual meeting is one of the triggers of this post.

My story in brief (skip ahead if you wish): Around 1989 or 1990, certain senior partners in the mid-size insurance defense firm in which I was an associate (and eventually a junior partner) fell into the orbit of certain business consultants and were "bit" by the marketing bug, and by the notion that with the right mix of public relations, new logo, and the like, new and lucrative business would fill the firm's coffers to the brim. In part because I sensed an opportunity for personal advancement and in part because, in a spirit of youthful humility, I thought that those partners and their consultants were making a hash of the (potentially successful) project and would benefit from the remarkable insights that I was sure that I alone possessed, I became an enthusiastic volunteer and participant. That participation led me to the local chapter of NALFMA, to attendance at some NALFMA annual meetings, and somehow or other—looking back, I am genuinely unable to account for it—to my being asked whether I might wish to serve on the NALFMA Board of Directors. I said yes, and I served for nearly two years (est.) before voluntarily withdrawing from the Board circa 1994.

My principal reason for leaving NALFMA was that I had also recently left my former firm, with two other attorneys, to start our own small firm, and that I needed to devote time and resources to the care and feeding of that practice. With the benefit of hindsight, I can see now that I had a second motive: the discovery that I have a deep-seated dislike for capital-M Marketing of most any kind, and in most any context. I do not take any particular pleasure in doing it, and I take active displeasure in being on the receiving end of it. For instance, I am confident that some particularly infernal torment must be reserved for those who will not simply accept "no" or "not interested" at face value, and who feel obliged to continue a conversation and to "meet my obections," as though I did not mean what I said or am too dim to know what I "really" want or need—which is, naturally, whatever they are trying to peddle to me.

(I hasten to add that my distaste toward Marketing does not translate into a personal dislike of marketers: many of the people I got to meet and work with in connection with NALFMA were a pleasure to know, intelligent and professional, albeit intelligent and professional in the practice of what must be regarded as Dark Arts.)

Two lines of online discussion over the past week have drawn me back to thinking about marketing and about its uneasy relations with the legal profession.

First came the story of Joseph Rakofsky*, an attorney from New Jersey, admitted to practice for less than a year, who undertook to defend a murder case in the District of Columbia. Rakofsky's performance for the defense, including an opening statement to the jury in which he conceded that he was trying his first case (or at least his first murder case), so dismayed the trial judge that the court declared a mistrial on the spot on the ground that the defendant was receiving patently inadequate representation. That would have been trouble enough, but Mr. Rakofsky had touted the mistrial as a positive outcome on Facebook, saying nothing of his own poor performance as the cause. Several bloggers, particularly criminal defense bloggers, inquired further and found that Rakofsky had been busily engaging in creating online appearances concerning his experience and qualifications that are not borne out in reality. Among those investigating and commenting were Scott Greenfield, Brian Tannebaum, and Eric Turkewitz, and a good collection of relevant links, with thoughtful commentary on the use and misuse of "expertise," can be found on Antonin Pribetic's Trial Warrior Blog.

Joseph Rakofsky has become, at least until our attention wanders elsewhere, the poster child for the disconnect between selling legal services and ethically, capably providing them. The website for The Rakofsky Law Firm—"financialcrimelaw.com", which has disappeared under the past week's scrutiny—featured a video of Rakofsky in front of an American flag asserting total devotion to his clients, as well as claims of his status as a "specialist," the implication that he was practicing in New York when he is only admitted in New Jersey, and more. As Carolyn Elefant observed, the site "[broke] nearly every advertising rule in the book", and many other details, to the discerning eye "scream[ed] out 'fly-by-night.'" (Another video, featuring Rakofsky's electric guitar stylings while he was still in law school, is still to be found on YouTube, accompanied by an invitation to "Make contact with me (in NYC) after I pass and am admitted to the bar for your criminal defense!")

The underlying, dumbfounding details of how it all came about were still emerging todayy, as reported by Jamison Koehler. Among the new revelations: that Rakofsky could be found in New York courtrooms (recall that he is apparently not admitted to practice in New York, the Wall Street address used on his website notwithstanding) offering his services to defendants' family members. If true, it ranks on the scale of "marketing" practices somewhere even below ambulance chasing. And, oh yes, he is reportedly refusing to return the retainer paid him in the murder case in which he was removed.

Meanwhile, the Legal Marketing Association held its Annual Conference last week at Walt Disney World in Orlando, Florida. The event came with its own Twitter hashtag, #LMA11, which I began monitoring after it came to my attention via Brian Tannebaum's post linked above and his running commentary in his own Twitter feed. The attendees' Twitter commentary came in two varieties. First, as is to be expected given the nature of the event and the nature of Twitter, many of the comments boil down to how much fun everyone was having. The second strain featured remarks on what was being said during seminar sessions and attendees' own thoughts on those subjects. What struck me particularly about the second, more substantive, group—apart from its relentless Positivity and Upbeatness, it being the nature of conventions and conferences generally (and, again, of Twitter) that never must be heard a discouraging word—was how little has changed in the nearly two decades since I was involved with the organization.

Just as seemed to be the case in the early '90s, legal services marketing seems to be premised on importing the supposed best marketing ideas and practices from other fields. "How can we implement a social media strategy?" is simply the 2011 equivalent of 1992's "Should we think about setting up one of those 'web sites' we've been hearing about?", which in turn was the latest variant on "How can we build our mailing list database/distribute our newsletters/get our name in the press?" Same old, same old, albeit today the unquestioning faith in The Tech seems more intense, and even less questioning, than ever. The core problem with importing practices from manufacturing or retail or even other service-related fields is, as always, that the law is genuinely different in that, so the theory goes, we have our clients' lives and livelihoods in our hands in a way that, say, Nieman-Marcus does not, and we owe lingering fiduciary obligations to place them first, even at our own cost. We have a continuing obligation not merely to seem but to be qualified, diligent, and on and on.

Also clear throughout the LMA11 thread, and true I suppose from the dawn of time: legal service marketers, whether in-house or from the outside, share a laser focus on their own justification and continued employment. Session after session at the LMA meeting appears to have emphasized the age-old question: "How do I prove to these ignoramuses with law degrees that I, the marketing professional, am of value to them so that I will keep my job/get and keep the big contract?" Here is an example of the theme, drawn from a post-LMA11 blog post by marketer Nancy Myrland:

I tend to feel protective of lawyers and legal marketers. You are my friends, my clients and my potential clients. I’ve been in-house where you are, dealing with many of the joys, frustrations, challenges, changes and situations you have. I seem to want to protect your reputations and brand. In this spirit, I have a few ideas for my in-house legal marketing friends regarding what to do now that you’ve been here absorbing this wealth of business, legal and marketing knowledge.

It remains as true today as it did when I started in-house in 1997, and as true as it was during the 10 years I spent at Time Warner. Marketing continues to be viewed as an expense by many firms, lawyers and CFOs. There are many exceptions, and I bow to you for understanding the value of marketing. However, it remains a marketer’s job to always [!] show and sell your value to the firm with real-life examples of how you bring more than brochures to the firm.

(Emphasis added.)

Now, I have no quarrel with self-preservation. Anyone, in any field, in any job, is understandably anxious to maintain his or her position, and legal service marketers have no less right to justify themselves than anyone else. That said, the fact that the discipline of "legal services marketing" is as much about the interests of the marketer as it is about anything else is part of the problem. Marketers first market "marketing," and secondarily market their lawyers' services to the outside world, and both activities require those lawyers to divert their attention from their own clients. Time and resources spent selling legal services means time and resources not spent performing legal services. Clients benefit, if at all, from what their lawyer does for them, not from what their lawyer does while looking for someone else to also be that lawyer's client.

So, then: am I suggesting that "marketing" has any causal connection to the Joseph Rakofskys of the world? Not directly. Joseph Rakofsky didn't mess up a murder defense because he marketed himself. He messed it up because he messed it up and had, it appears, no business taking it on. But it is clear from his now-absent website that he had convinced himself that it was acceptable to believe, or not to care about, his own hyperbole, and that he confused claiming to be a thing (a well-qualified criminal defense attorney) with actually being it. And that, sadly, is the eternal essence of marketing: the marketing of anything requires persuading the prospect that he or she needs and wants what is on offer, regardless of whether what is on offer is actually what the client needs and regardless of whether the proffered service matches, in reality, the appealing description offered by the marketer. If reality and appearance actually match one another, so much the better, but it is of no matter to the marketing transaction. Get "butts in the seats" and sort the rest out after.

As a marketer of himself, Joseph Rakofsky was actually a success: he got himself a paying client and, for the moment, still has his fee. His reputation? Perhaps, in the long run, his license? Lost or in peril, I suspect. Or perhaps not: attention spans aren't what they used to be, and perhaps in time no one will know or remember.

What is my opinion of legal services marketing at this point? Still, after decades, unsettled. I am entirely uncomfortable in placing any reliance on marketing as an activity separate from the practice itself: in a perfect world, a lawyer would be qualified or not and accurate information on who was which would be absorbed through prospective clients' pores. Not, as they say, gonna happen. In this imperfect world, it is unrealistic to expect that client referrals alone will sustain most attorneys, and therefore it is to be expected that most attorneys will need to do something "marketing-like" to keep body and soul together, and to support their families or their love of a good claret (or both). The trick is to do those things without straying from the responsibilities that we took on when we chose this profession.

In the end, I am left thinking of legal marketing as rather like the poppies in The Wizard of Oz: appealing to the eye, but still "something with poison in it."

* Correction: In the original version of this post, "Jonathan" Rakofsky was given at this point as the name of the attorney involved in the reported D.C. mistrial. The correct name, which I had used everywhere else in the post, is Joseph Rakofsky. The typographical error on my part was brought to my attention on April 23, 2011. The name has been corrected. I apologize for any confusion that may have been caused by my inadvertence, and I thank Mr. Jonathan Rakofsky for bringing the matter to my attention.

Six years ago today, on March 28, 2005, a major earthquake registering 8.7 on the Richter Scale occurred off the coast of Sumatra, in Indonesia. It came little more than three months following the horrific 9.1 quake and tsunami of December 24, 2003, and stood as the second strongest quake of the new century until it was surpassed by the Chilean earthquake of February, 2010 (8.8) and, of course, the 9.0 earthquake and ensuing tsunami that struck northeastern Japan on March 11 of this year. In the midst of the unimaginable devastation of the quake and tsunami, enormous attention has also been turned toward the damage to the Fukushima nuclear power plant, and the resulting releases of radioactive material.

It is that nuclear element that provides our theme today for the 304th edition of Blawg Review, because March 28 is a date of some significance in relation of Our Friend, the Atom, and to both the military and civilian uses of the power of nuclear fission.

On March 28, 1946, the U.S. Department of State made public the so-called Acheson-Lilienthal Report, officially titled A Report on the International Control of Atomic Energy. At the time, the United States was the world's sole nuclear power, although the Soviet Union had begun the work that would lead to its possession of atomic weapons by 1949. The Acheson-Lilienthal Report endorsed imposition of international controls over all sources of potential nuclear material, with distribution of such materials in controlled amounts to individual nations for use in developing peaceful uses of nuclear energy. It also proposed that the United States voluntarily give up its monopoly on nuclear weaponry, providing the Soviet Union with access to American knowledge on the subject in exchange for a mutual agreement to halt any further production of atomic munitions. The report's proposals ultimately failed in the United Nations Security Council, being deemed unsatisfactory to both U.S. and Soviet interests, and the Cold War nuclear arms race was on.

More to the point, thirty-three years to the day after publication of the Acheson-Lilienthal report, on March 28, 1979, a cooling system malfunctioned in the Unit 2 Reactor at the Three Mile Island nuclear power plant, located outside Harrisburg, Pennsylvania. While the reactor shut down automatically, it did not do so before a release of radioactive steam within the reactor core. Some of that radiation in turn made its way into the surrounding environment.

Here, an excerpt from the report of the incident on NBC's Nightly News for March 28, 1979. Note, in addition to the stylish hair and clothing styles of the day, the relative calm of all concerned. The full version of the report—which was available via Hulu.com last week but has since been withdrawn—discloses that NBC gave the story only five minutes—an eternity now, but not remarkable for a major story of the day in 1979—before moving on to a report on that day's argument in the U.S. Supreme Court in the affirmative action case of United Steelworkers of America v. Weber:

ABC's evening news report of March 28, 1979, is not available for embedding, but it can be viewed here; it includes a useful animation of what was understood to have occurred that day.

Nuclear and Related Risk: Who You Gonna Call?

I mention the calm demeanor of those reports because discussions of the ongoing nuclear incident in Japan has been anything but calm, at least in this country. Notwithstanding that Japan is some 5000 miles away, Californians have been treated to scary animations showing a "plume" of radiation—measured less than comfortingly in "arbitrary units"—headed for Los Angeles, triggering a run on kelp tablets. Fortunately, intrepid investigative journalists pursuers of truth are unfazed by the Molecular Menace. Exhibit "A," prosecutor turned CNN host Nancy Grace:

It is a simple fact: Radiation scares us, and not without reason. And yet, it is worth recalling that although the phrase "Three Mile Island" haunts the policy landscape as a threatening rhetorical spectre, the number of deaths attributable to the actual Three Mile Island radiation release is generally accepted to be . . . none at all. Long-term health impacts from Three Mile Island are generally (albeit not universally) agreed to have been negligible. Even the far more serious 1986 Chernobyl disaster —the 25th anniversary of which will arrive on April 26, 2011—was deemed responsible for fewer than 50 actual deaths by 2005, although its long-term consequences also include at least 4000 diagnosed cases of thyroid cancer (99% of them non-fatal, however, by 2005). Radiation is, in short, nasty stuff and not to be trifled with, but perhaps not nearly so threatening as we may bring ourselves to believe.

The relatively (surprisingly?) low number of actual deaths from radiation accidents and exposures drives this chart—subject of frenzied rounds of blogging and tweeting this past week—comparing the number of deaths per terawatt hour of power produced by various energy sources:

I offer this image not necessarily to endorse its findings, but instead to raise those old favorite problems: actual risk vs. perceived risk and the sometimes uncomfortable balance of frequency of loss vs. severity of loss. To oversimplify as least slightly, nuclear power accidents have been marked, over the past half-century, by relative infrequency, and their actual severity has been, while serious, not insurmountable. The worst case really has not happened. The "worst possible case," however, is still by definition a possible case, and it would have a severity that is, shall we say, seriously unpleasant to contemplate.

Liability for damage to persons and property arising from potential nuclear accidents is sufficiently serious or incalculable that the risk is uninsurable in the standard insurance markets. Indeed, virtually every policy of liability insurance will include an explicit exclusion of coverage for nuclear exposures. Many of the policy decisions relating to liability for nuclear damage have been made on a nation by nation basis. Some international agreements on responsibility for nuclear losses have been adopted, largely under the auspices of the International Atomic Energy Agency [PDF], but the United States is not a signatory to those agreements.

In general, as summarized by the IAEA, liability for nuclear accidents is imposed on a strict liability basis—i.e., liability exists regardless of the actual cause of the loss, whether by negligence, recklessness, willful misconduct, or pure accident—on the operator of the nuclear facility, and only on that operator. Others who do not themselves operate the nuclear plant are free from liability exposure, even if they were intimately involved in day to day activities and decisions. Thus, Fox Business could report that General Electric, on whose design the Fukushima plant is based and which "supplied technical assistance" at the plant, likely faces no direct liability as a result of recent events.

All systems of liability have built-in biases and values. Every legal system balances the interests of plaintiffs and defendants, of society and the individual, of justice and economics. On the latter measure, international nuclear liability regimes clearly favour economics over justice for the victims, who may not be fully compensated because of limitations on the scope and amount of liability. Recognising this value system won’t change the legal aftermath of the Fukushima I disaster, but is important that we bear it in mind as nuclear liability regimes continue to evolve. Because after all, there has to be a limit on how much we allow monetary calculations to trump our own humanity.

In the U.S., the Price-Anderson Act governs the insurance and financial responsibility requirements imposed on nuclear operators:

The Price-Anderson Act, which became law on September 2, 1957, was designed to ensure that adequate funds would be available to satisfy liability claims of members of the public for personal injury and property damage in the event of a nuclear accident involving a commercial nuclear power plant. The legislation helped encourage private investment in commercial nuclear power by placing a cap, or ceiling on the total amount of liability each holder of a nuclear power plant licensee faced in the event of an accident. Over the years, the "limit of liability" for a nuclear accident has increased the insurance pool to more than $12 billion.

Under existing policy, owners of nuclear power plants pay a premium each year for $375 million in private insurance for offsite liability coverage for each reactor unit. This primary, or first tier, insurance is supplemented by a second tier. In the event a nuclear accident causes damages in excess of $375 million, each licensee would be assessed a prorated share of the excess up to $111.9 million. With 104 reactors currently licensed to operate, this secondary tier of funds contains about $12.6 billion. If 15 percent of these funds are expended, prioritization of the remaining amount would be left to a federal district court. If the second tier is depleted, Congress is committed to determine whether additional disaster relief is required.

The insurance coverage, particularly for the so-called "second tier," comes from a single source, American Nuclear Insurers, a pool of major commercial insurers jointly underwriting the potential risk. In the event a nuclear incident ever exceeds the available Price-Anderson insurance coverage, the Great and Good American People, through the federal government, would likely step in.

In the wake of the recent earthquake and tsunami, the situation at the Fukushima nuclear facility remains in flux from day to day, with the ultimate losses directly attributable to it (as opposed to the larger geophysical disaster) still unknown.

The recent earthquake in Japan was about as serious a quake as can occur, but since it was more than 70 miles from Tokyo, the cat bonds will barely help the insurance companies that spend millions of dollars on them.

***

For now, investors seem to be doing a better job than insurers at determining criteria to make cat bonds lucrative, but that can change very quickly. Insurers may come to decide that they're paying too much for this protection, however. After all, if they had saved the premiums they paid in the past five years, they would be 64% of the way towards having enough money to cover the costs from a major disaster that cat bonds would provide.

The direct victims themselves may well have only limited insurance resources available to them. In the immediate aftermath of the earthquake, Tyler Cowenpointed to an article in the Globe and Mail that notes:

[V]ery few people in that region of Japan held earthquake insurance, and also because of strict loss limits imposed by the Japanese government. For instance, residential buildings and furniture can be covered, but very expensive jewelry and artwork cannot, and there are rules that ban people from taking out insurance once an earthquake warning has been issued.

Mr. McGillivray said the Japanese government protected domestic insurers by limiting foreign participation in the system and, to keep the risks manageable, limited the payouts.

Now we come to the point at which it is traditional to cast aside the purported theme of a Blawg Review, and to shift to pointing out recent blawging that tickles the host's particular interests and fancies, or that has slipped in for any of a hundred other reasons. Let's take the plunge, shall we? In no particular order:

And speaking of devil may care attitudes: howzabout Mr. Greenfield's take on the less-than-experienced Indiana prosecutor who wishes criminal defendants would help the state save some money by giving those pesky jury trials a miss?

I can't speak to what went through the minds of the good people of Starke County, Indiana, when they decided to hand over to a kid whose entire legal experience was shorter than the shelf life of refrigerated blue cheese salad dressing the authority and discretion to put people in prison, but it seems that his assertion that defendants charged with felonies are less concerned with having a jury trial than saving the county some money.

To his credit, [prosecutor Nicholas] Bourff recognizes that the elimination of jury trials isn't entirely in his hands:

'The one major drawback there is that if a defendant wants a jury trial, he or she has that right. If the defendant agrees to a bench trial, then it would save thousands of dollars and it would shave off quite a bit of time as far as eliminating the need for jury selection. '

One might think that the major drawback is that the new prosecutor advocates the evisceration of a constitutional right for the benefit of the taxpayers, not to mention those criminal defense lawyers who really hate wasting all that time picking a jury before their clients get convicted.

And just think of the savings if we weren't such silly sticklers for the whole "presumption of innocence" thing!

Tip to future Blawg Review hosts: If pressed for time, you can still produce a pretty good (albeit short) Blawg Review edition by giving your readers just one bit of advice: go read Scott Greenfield. This idea did not come to me until well into the hosting process, so I was unable to save time by following hit here. You're welcome to it, though.

On Maryland's Eastern Shore, chicken farming is a mainstay of the economy. The State of Maryland likes its chicken farmers, and wants to encourage the industry. So why, wonders Cato's Carter Wood at PointofLaw.com, is the Environmental Law Clinic of the State-supported University of Maryland trying so hard to shut the industry down?

Whatever it is we are doing in Libya, we are assured by the Administration that we are not at war. We are, it seems, engaged in kinetic military action (as opposed to military action in which one stands around motionless). By whatever name, Yale Law Professor Bruce Ackerman is of a mind that it's unconstitutional.

By any name and in any place, military action can bring out some of the best and much of the worst in human nature. Charon QC noted the revelation by Germany's Spiegel of photos documenting the bloody work of a rogue self-styled "kill team" in Afghanistan: "This… is why we need the Rule of Law."

Taking care of all those soldiers and veterans is expensive, to the point that Secretary of Defense Robert Gates has suggested that the spiraling Defense Department health care budget has itself become a national security concern. On his GovtFraudLawyer blog, Dan Hargrove wonders: "Is Fraud to Blame?"

The third rejection by the court of a proposed settlement in the ongoing class litigation involving Google Books has been the talk of the IP community. Writing at The Laboratorium, Prof. James Grimelman takes us, in extravagant detail, "Inside Judge Chin's Opinion."

Elsewhere in IP land: does anyone remember LimeWire, a peer-to-peer filesharing service popular among music-sharers in the days when Napster was still really Napster and everyone dreamed of the Web as a [free!] Universal Jukebox? You don't? The music industry does: they continue so sue LimeWire for infringement and this week informed the Court that damages should amount to $75 trillion. Overlawyered reports here on the judge's reaction. I.P. Blawg weighs in here.

"Libel tourism" is the practice of filing defamation actions in London courts to take advantage of the UK laws that are highly [some would say absurdly] favorable to plaintiffs. Efforts are now afoot to reform British defamation law to cut back on suits that have nothing else to do with the country. On his Trial Warrior Blog, Antonin Pribetic reports on "UK Libel Reform and the US SPEECH Act: A View from Canada."

Finally, to round out our theme, a musical public service message from songwriter Joseph Aronesty and son Andrew Aronesty: a song written in 1979, now updated and videofied to acknowledge ongoing events in Japan. The views expressed are those of the singer, and no endorsement or warranty, express or implied, is made or given by this blog (which has no particular quarrel with either solar or nuclear power in theory), Blawg Review, or any other person or institution. Void where prohibited. Prohibited where void.

~~~

Particular thanks to the Anonymous Editor of Blawg Review for his assistance in tracking down worthy links for inclusion in this edition.

Blawg Review has information about next week's host, and instructions how to get your blawg posts reviewed in upcoming issues.

~~~

A Closing Blawg Bleg:

Who am I kidding? I am next week's Blawg Review host, at my personal/cultural blog, a fool in the forest. For reasons that will become clear in good time, I am particularly interested for the next edition in blog posts that examine, or that exemplify, Things That the Law, or Lawyers, Could Do Without. Your submissions and suggestions, early and often but mostly early[hint hint, nudge nudge], will be welcome and appreciated.

March 23, 2011

The return, to these pages, of Blawg Review, the blog carnival for lawyers and everyone interested in the law.

Please join Decs&Excs on Monday, March 28, 2011, for Blawg Review #304. Be warned, however, that this edition will not be without Risk.

This will mark the fourth Blawg Review excursion in the past five years for this blog. In keeping with tradition, the edition following #304 is scheduled to appear the following week on my personal/cultural blog, a fool in the forest.

Decs&Excs welcomes submissions of the best, most intriguing, most noteworthy law-related blog posts of this week, to be considered for inclusion in BR #304. Submissions can be directed via email to post@blawgreview.com, or through the Blawg Review submissions page. Detailed information on submission guidelines can be found here.

In the meantime, the current week's edition—Blawg Review #303—is being hosted at the Blawg Review main site, under the auspices of the Anonymous Editor of Blawg Review. Please direct your attention there while I continue to prepare for the revelation of edition #304 five days hence. Thank you, and good blawgs to you.

February 15, 2011

This is Mr. Machine. He gets wound up, rolls about the place in a mechanical fashion, opening and closing his mouth and making a bit of a racket. In his way, Mr. Machine is just like many of the lawyers you might encounter out in the world.

Mr. Machine sprang to mind as I was reading two posts, each dated today, on the interplay between lawyers and technology. Neither post mentions the other, and neither is the typical sort of "how to improve your practice and earn untold riches by embracing the latest shiny electronic tchotchke [SET]" puffery that so infuses certain quarters of the legal blogging world. Rather, each is concerned in some fashion with the question of whether the Next SET might replace lawyers, instead of enhancing them.

Inspired by this week's series of Jeopardy! episodes pitting exceptionally clever mere humans against IBM's mighty "Watson" computer system, Martin Ford takes to The Atlantic's business blog to ask, "Can a Computer Do a Lawyer's Job?" He concludes that it is very probable that a computer could.

If you agree that the game of chess requires creativity within a set of defined rules, then could not something similar be said about the field of law? Currently there are jobs in the United States for many thousands of lawyers who rarely, if ever, go into a courtroom. These attorneys are employed in the areas of legal research and contracts. They work at law firms and spend much of their time in the library or accessing legal databases through their computers. They research case law, and write briefs which summarize relevant court cases and legal strategies from the past. They review contracts and look for loopholes. They suggest possible strategies and legal arguments for new cases that come to their firms.

The first thing you might guess about these attorneys is that they are already subject to offshoring. And you would be correct: in India there are already teams of lawyers who specialize in researching case law not in India—but in the United States.

* * *

*** What about the more advanced or creative aspects of the lawyer's job? Could a computer formulate a strategy for an important legal case? For the time being, this may be a challenge, but as we saw in the case of chess, a brute force algorithm may ultimately prevail. If a computer can evaluate millions of possible chess moves, then why can it not also iterate through every known legal argument since the days when Cicero held forth in the Roman Forum? Would this be a "lesser" form of legal creativity? Perhaps it would. But would that matter to our lawyer's employer?

"Knowing every legal argument" is certainly not the same thing as winning every legal argument, especially when the person making the decision is a human being, prone as all humans are to fall into the occasional error or to be persuaded by something other than the weight of authority. (What courtroom lawyer hasn't presented the best framed, most flawlessly argued position ever only to have a judge adopt the patent nonsense proffered by the other side? That is how appeals happen. Sometimes, that is how appeals are won or lost. But I digress.) The particular skills that often make the difference between effective advocacy and ineffectual venting—tone, manner, the timing of a quip, the execution of a pause, the innate sense of when one has said enough and not too much—are not immediately open to being simulated by even the most sophisticated calculational mechanics. But it is not out of the question that they someday might be.

We are again in an era in which "technology" is touted as the most promising solution to virtually every problem. It is a constant mantra for our political leaders: new technology will solve our ills and, above all, Create New Jobs. But as Ford's piece emphasizes, technology that does things that are now done by humans more efficiently or less expensively does not create jobs: it eliminates the need for some jobs to be done by humans at all.

This is, of course, the story of the Industrial Revolution and of every other major technological shift for the past several centuries. It is not an argument against technology as such, so much as it is a reminder that one should not embrace the benefits of advancing technology blindly. Every new technology, like every other form of refuge, has its price. If you are the one currently doing the job that can be done as well or better by a computer, Mr. Machine becomes a less welcome playfellow.

Some will insist—and I am by nature entirely sympathetic to their insistence—that the qualities and attributes that most matter in the practice of law can never be synthesized or mimicked, whether by a machine or by another human who does not in fact possess them. One such insistent voice, I suspect, would be Scott Greenfield, whose Simple Justice post "Driving that Train..." points out that an American Bar Association panel on "The Future of Lawyering" is convinced that the day has already come when lawyers are being supplanted by software and search engines, and that it only remains to choose what color balloons we will drop as we rapturously welcome our new technological overlords. Greenfield is having none of it:

Until now, I hadn't realized how out of touch I've become. It suddenly dawns on me why [former Connecticut Bar president, Fred] Ury concludes that people can obtain answers to 'complex legal questions easier and cheaper' on Google than [by] going to a lawyer. I didn't see the writing on the wall.

* * *

I've seen the legal advice the internet has to offer. It's bad. It's worse than bad. It's dangerously awful. It downright sucks. So what Fred Ury is saying is that the advice coming from living, breathing lawyers is no better than the Google garbage.

Holy moly. Up to now, I had been looking at it all wrong. It had long been my understanding that the important official people who desperately wanted to hold high office in bar associations were of the view that lawyers offered something more, something better, than crap on the internet. Never did I realize that the profession had devolved to the point that living, breathing lawyers were not only unworthy of being retained, but superfluous, incapable of doing any better than a $49 will. Who knew?

Greenfield is vowing to soldier on the "old-fashioned" way, and he should. The environment in which it is done has changed, and it will continue to change, but the essential purpose of the profession of lawyering must not. In fact, I would suggest that one of the identifying traits of a true "profession" is that the professionals within it do what only a trained and qualified human being can. There is no reason for anyone who calls himself or herself a lawyer to do so unless the entire point of their entry into the practice of law is to provide to their clients the kinds of advice, counsel and representation that neither a Google search, nor a fancy SET, nor a Watson-style "brute force algorithm" can replace—because if you can be replaced by any of those, odds are that you will be, and sooner than you expect.

The day any of us loses sight of the purpose of our profession, or the day that the machines actually can do our particular job better than a good and devoted human professional, is the day to pack it in and open a pastry shop.

January 20, 2011

For most of the past decade, claims and litigation arising from the hijackings and attacks of September 11, 2001, have worked their way through courts and conference rooms toward something resembling resolution. Most of those claims have been concluded at this point, but a few remain. One of those is the case of Cantor Fitzgerald & Co. v. American Airlines, still active in the U.S. District Court for the Southern District of New York. Financial services firm Cantor Fitzgerald had its headquarters in the top five floors of Tower One of the World Trade Center, which fell after being struck by American Airlines Flight 11 from Boston. Of the 2,977 non-hijackers killed in the attacks, 658—more than one-fifth of the total—were officers or employees of Cantor Fitzgerald. The American Airlines litigation involves Cantor Fitzgerald's claims against the airline for damages claimed to have been sustained because of the airline's claimed negligence in not identifying or stopping the hijackers.

This week, Judge Alvin Hellerstein issued a decision granting partial summary judgment in favor of the defendants, limiting the types of damages the plaintiff may be able to recover at trial. The case is largely being decided under New York law, but the applicable rules of law would be largely the same in any other state. For that reason, and because the ruling provides a window on a major pice of litigation that goes on largely ignored by those who are not parties to it, it warrants a post.

The claims surrounding the destruction of the World Trade Center towers fall roughly in to two categories: those that relate principally to personal injury or death and those that relate principally to property damage and economic loss. Of the injury and death claims, all but 95 were resolved through the Victim Compensation Fund established by Congress, rather than by court action. Of the 95 death and injury claims that went to litigation, all but one have now settled and the last is set for trial in June of this year.

Cantor Fitzgerald's claim is one of the 21 property damage cases, all but three of which were resolved in a mediation on late 2009. One of the non-settled property cases was subsequently ordered dismissed. A second has been largely resolved, with only limited issues remaining for trial. The last is the claim of Cantor Fitzgerald. Prior to the 2009 mediation, Cantor Fitzgerald had estimated its compensable losses at approximately $100 million; it arrived at the mediation with a revised estimate, raising it to nearly $1 billion. As Judge Hellerstein dryly notes in the introductory portion of his opinion, that shift in position "caused a breakdown in mediation efforts before they had even begun." It is that tenfold increase in claimed damages that is at the core of Judge Hellerstein's ruling this week.

From the outset, Cantor Fitzgerald has been seeking compensation for the destruction of its leasehold at the World Trade Center and the property and infrastructure at that location. Prior to the mediation, it had estimated those direct property losses at some $96 million. When it shifted position, Cantor Fitzgerald significantly reduced the property damage claim, to slightly more than $7 million, while simultaneously increasing its "business interruption" claim to a walloping $879 million, some seven times its original size.

The expansion of the business interruption claim was largely supported by Cantor Fitzgerald's expert witness, Gregory S. Thaler, whose report and deposition testimony adopted a "holistic" approach to the valuation, considering "all the damage that occurred to Cantor Fitzgerald that day," including the fact that when the plane struck it "killed people, it destroyed office space, it destroyed the books of business, it destroyed the relationships." Although Thaler and Cantor Fitzgerald attempted to link all of the heightened business interruption losses to the physical destruction of Tower One, the underlying premise of the recalculation became clear: Cantor Fitzgerald was seeking to recoup the business that it lost because the people who formerly provided the services and maintained the underlying relationships supporting the company's market share are no longer living.

In ruling that Cantor Fitzgerald cannot claim losses arising from the deaths of its officers and employees, Judge Hellerstein points to two core doctrines. First, long-settled New York law establishes that a defendant is only liable to a business for business interruption losses to the extent that defendant has caused direct physical damage to the plaintiff's property. Business losses caused by damage to some other property, or by damage to some other non-property interest, are not compensable:

The destruction of Tower One . . . destroyed Cantor Fitzgerald's leasehold to the top floors of the Tower and its property within that leasehold. Cantor Fitzgerald is entitled to claim damages naturally and probably resulting from the damage it suffered. These damages can include injuries to property, and to lost profits naturally and probably flowing from the injury to its property. But Cantor Fitzgerald cannot bootstrap this entitlement into a wholesale claim of business interruption damages not matching the corresponding duty of the [defendant].

Second, in New York as in most (all?) other states, the right to compensation for the death of a human being is purely a creation of statute. Each state's "wrongful death" statute specifies who can make such a claim—generally only the heirs or immediate family of the deceased—and what damages are permitted—generally only purely pecuniary losses, with no compensation for grief or other intangible harms. New York's wrongful death law grants no right to an employer to seek any compensation for the death of its employees. Judge Hellerstein holds that to the extent that the murders of its officers and staff are a necessary predicate to Cantor Fitzgerald's claimed business losses, the company is not entitled to compensation for those losses.

Cantor Fitzgerald is not the first business to try to plead around this rule by contending it is suing for a business loss, and not for the wrongfully caused deaths of its employees. . . . [But] it is clear that the major part of Cantor Fitzgerald's loss resulted from having lost the services of its deceased employees. This is evident in Thaler's report. New York law does not permit this holistic approach.

No one can deny the emotional and financial hurt suffered by Cantor Fitzgerald, and the families of its officers and employees. But as a matter of law, Cantor Fitzgerald's claim for damages, however theorized, may not include claims for lost profits resulting from the deaths of, and injuries to, it officers and employees on September 11.

Cantor Fitzgerald is directed to amend its claims to "eliminate the impermissible aspect" by February 28; a conference to set a trial date is now scheduled for early March.

For those who may be interested, I have uploaded a copy of the Court's full 21-page decision, here [PDF].